Track Your Medical Transcription Income and Expenses

You don’t need to run out and learn double-entry bookkeeping in order to manage your own medical transcription business finances. It’s not like you’re going to hire employees, lay in supplies, and start building widgets and shipping them to China.

More likely, you’ll start out with one or two transcription clients. You may expand your client base from there or keep it just like that.

Although you could track your business income and expenses using a handwritten ledger and a shoebox, there are better ways to go about it. The table lists them and summarizes the pros and cons of each.

Bookkeeping Methods

Method

Pros

Cons

Handwritten ledger or notebook

It works even when the power is out.

It’s slow, inflexible, and went out with the Stone
Age.

Computer spreadsheet

You probably already have a spreadsheet application (such as
Microsoft Excel) on your computer. It does the math for you.

You’ll have to set it up and enter formulas. Unless
you’re a whiz with spreadsheets, you won’t get many
useful reports out of it.

Personal finance software

It’s inexpensive, and you already may be using it for
personal finances. You can automatically download transactions from
your bank and credit card accounts to the software.

It doesn’t provide much in the way of invoicing and
client tracking functions. It wasn’t designed to keep track
of clients and receivables.

Small business bookkeeping software

It works a lot like personal finance software but includes
better invoicing, business reporting, client and cost tracking, and
lots of helpful reports.

It’s more expensive than personal finance software, and
you may find all the features and options confusing at first.

A professional accountant/bookkeeper

You can focus on transcription and keeping your clients happy.
Meanwhile, your paperwork and business finances are being managed
by a pro.

You won’t have intimate knowledge of your finances. There
may be a lag between when things happen and when your bookkeeper
enters them into the system. It’s also the most expensive
option.

Unless the thought of managing your own income and expenses triggers an urge to run screaming down the street, a software package is usually the best bet.

Just because you do your own bookkeeping doesn’t mean you have to prepare your own tax return. Hand over the reports from your bookkeeping system and let a tax-prep person have at it!